Complete Story

12/23/2008

Uniform Rates For Pole Attachments Would Spur High-Speed

By: Linda Haugsted, Multichannel News

Uniform, lower rates for attaching broadband equipment to utility poles for all telecommunications providers would spur broadband deployment, especially in rural areas, according to a new policy paper by the Phoenix Center for Advanced Legal & Economic Public Policy.

The policy statement from the non-profit think tank concludes that the "current, complicated rate structure" charged by incumbent utilities causes "inefficient investment decisions and generally results in less broadband deployment." A uniform pricing structure would benefit consumers and increase social welfare, the organization opined.

Pole attachment rates paid by, for instance, cable operators who place plant onto telephone poles, are set by the Federal Communications Commission or by state utility commissions. The rates, now averaging in the mid-teens per pole, are set by coming up with the cost of the owning utility for the bare pole and the cost of ongoing maintenance divided among the users of the pole.

But for years, the companies that own the poles have argued that the rates they are paid for using the poles do not reflect modern costs. Also, they argue cable companies that have moved into telecommunications services should pay those higher use rates, not low cable rates, for using the poles.

"The convergence of communications networks has many implications, with one being that the regulated prices for pole attachments should likewise converge," said George Ford, co-author of the study and chief economist at the Phoenix Center. "Having different rates structures for cable and telephone companies might have made sense when congress and the FCC established this system thirty years ago when networks offered very different services. Today, economically efficient pricing implies the pole rate should be common for all broadband providers, and also be much lower than the rates charged today."